Shipping Industry (Taxation)

asked the Chancellor of the Exchequer whether he has yet come to a decision with regard to the immediate application of the proposed post-war industrial taxation 2 per cent. initial allowance to the shipping industry.

I have had under consideration the issue raised by my hon. Friend in her Question of 1st August regarding orders placed for new ships as from 25th April, 1944. The proposed 20 per cent. initial allowance in respect of expenditure on plant and machinery forms part of the general proposals to afford taxation relief to industry in the post-war years when there will be large scale re-equipment of all branches of industry and these proposals are not concerned with the taxation of industrial profits during war time. There can therefore be no question of making the proposals in any way retrospective. I agree however that the circumstances of the shipping industry call
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for special consideration as the replacement of ships lost by new ships to he operated during the war on Government account has the effect of making new ships available for use after the war and to this extent the process of re-equipment is in fact going on at the present time. Accordingly in the legislation which I propose to submit to Parliament in due course the initial allowance will apply to the ships referred to by my hon. Friend in her question of 1st August, 1944. I may add that it will also apply to ships offered by the Ministry of War Transport for postwar delivery. My proposal would, of course, be subject to the condition that effect cannot be given to the allowance at an earlier date than the date from which the allowance will come into force for industry generally, and that account will have to be taken of any depreciation already allowed.